R70 million debt to Garden Route municipality deemed ‘uncollectable’

The financial health of the Garden Route District Municipality is under scrutiny as it confronts nearly R70 million in debts linked to unpaid fire service charges. Nearly R70 million owed to the Garden Route District Municipality is at risk of being permanently lost, primarily due to unpaid fire service accounts, despite the municipality achieving yet another clean audit. That is the picture painted in the oversight report on the municipality’s 2024/25 annual report, which was served before councillors at a special council meeting on Thursday.

TheGarden Route District Municipalityoversees and supports several local municipalities across the Garden Route in the Western Cape, including George, Knysna, Mossel Bay, Oudtshoorn, Hessequa and Kannaland. The report, compiled by the Municipal Public Accounts Committee (MPAC), is the council’s formal review of the municipality’s financial and service delivery performance for the year ended June 30. Though the Auditor-General issued “an unqualified audit opinion with no material findings”, the oversight report showed serious financial pressures remained behind the clean audit outcome.

Receivables from exchange transactions were described as “significantly impaired”, with the impairment allowance increasing to R69,877,737 in 2024/25, compared to R50,591,262 in the previous financial year. Of the R69,877,737 impaired, R52,435,277 — or 75% — related to fire services accounts. The report said the impaired amount was not collectible.

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“This has been the case for quite a number of years,” the report said. In practical terms, most of the debt on the municipality’s books stemmed from unpaid fire service charges that had accumulated over time and were not being recovered.

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